Fifty Shades of the IMF: America and the Empire of Dominance

Fifty Shades of the IMF

America and the Empire of Dominance

The BRICS Alternative and the Case of South Africa

Narcissism, not wisdom, guides American policy, which is itself a mask of anarchy.

James Luchte

Unlike the General Assembly of the United Nations, where each country has one vote, decision making at the IMF was designed to reflect the relative positions of its member countries in the global economy. The IMF continues to undertake reforms to ensure that its governance structure adequately reflects fundamental changes taking place in the world economy.

The International Monetary Fund

The economic health of every country is a proper matter of concern to all its neighbours, near and far.

President Franklin Roosevelt

As with De Sade’s Justine, the IMF lures its victims with pledges of aid.

Again and again, the naive girl, still believing in virtue, finds herself imprisoned. Such was the case, for instance, with the abbey in the forest, inhabited by monks. Justine is saved, she believes – but the monks reveal themselves to be sadists, torturing, raping and killing their prey. The monks, hiding behind a mask of sanctity, do what they like, satisfy their peculiar and perverse desires, while disciplining and binding those they have abducted (ab ducere, to lead from, astray). The monks wait for their quarry as a spider who strikes. But, as with the carnivorous plant that seems to offer water, the monks contrive to bind Justine even as they extend a helping hand. Thomas Jefferson, writing in the same era, warned, ‘…under pretence of governing they have divided their nations into two classes, wolves and sheep. I do not exaggerate.’[1]

It is a cliché that power is an aphrodisiac. Yet, it is simple to view the contemporary West as a sado-masochistic political economy in which elites have as their raison d’etre the creation of conditions for the perpetual reproduction and fulfilment of their sadistic desires (‘way of life’). The middle classes, including the intelligentsia, masochistically submit to the power of the elites for their own share of power, and thus, pleasure. It could also be suggested that Europe and Britain submit to the US in the same way. Those at the bottom experience sadism only as the master vents his wrath and joyfully basks in his power before a silent God. This is a cultural configuration addictively attuned with a global economy of vast inequality, a situation which places the vulnerable in imminent danger. There is more slavery, for instance, in the contemporary era than in the entire recorded history of our species.

Deleuze speculates that the contradiction between the declaration of freedom, equality and fraternity in modern capitalist democratic revolutions and the context of the evident wage slavery and systemic inequality of a capitalist, class society has exploded into the Western disease, a schizophrenia which seeks to function in a world which is radically out of tune and dissociated from reality. Marx wrote of this phenomenon in section 4, chapter 1 of Das Capital, ‘On the Fetishism of Commodities,’ in which he writes of our alienated perspective in which we give life to phantoms of thought and language, a mystical thinking, as with Adam Smith’s invisible hand or Keynes’ ‘animal spirits.’ The radical class apartheid in which elites reside in secure facilities and habitats, having no direct contact with demographically diverse ‘others’, with those below, is a regime of vertical, repressive power. This power is created through architectures, physical security forces, the mass psychology of distraction and siege – people become rats in a maze, an imposition, an abduction – but one that is continuously being resisted. One must un-learn the passive delusions of mystical economics and begin to build a different future based upon the principle of radical equality.

In the first chapter of Plato’s Republic, there is a seminal dispute between Socrates and Thrasymachus on the meaning of justice. The latter insisted upon the definition of justice as ‘the preference of the stronger.’ Socrates, with an irony which drove Thrasymachus from the room, rejected definitions in words and insisted that justice could only be shown, demonstrated in practise and according to a specific set of principles. The irony, in the present context, is again reflected in the IMF’s self-description (in terms of representation), as an organisation which operates according to the preference of the stronger, but was the creation of the United Nations, an organisation founded upon cooperation and the equality and sovereignty of all nations. It is certainly not clear that Franklin Roosevelt, if he had lived, would have supported the aforesaid self-description of the IMF. After all, he had led the fight against the British with respect to the fate of the Nazi-dominated BIS (Bank of International Settlements). Indeed, a certain coup d’ grace (for the rightists) occurred with the death of Roosevelt, one which allowed for not only the continuation of the BIS, but also the nuclear attacks upon Japan, arguably among the worst war crimes in human history.

Not only was the law of conquest upheld with respect to the American victory, but the preference of the stronger has been enshrined, not only in the so-called international institutions but also in the very organisation which birthed the IMF. The blatant lack of democracy in the UN is reflected in the ascendancy of permanent members of the Security Council – not to mention the current impasse between the US and Russia. With effective control of the IMF and World Bank, a control enforced through NATO and unilateral – and mostly illegal – operations, whether political economic or militaristic, the US remains a hegemon on the brink of the abyss. Global power constructs are in fragmentation, alternative poles of power (and thus choices for nations seeking to escape their captors) have emerged in BRICS, AIIB, CDB and NDB, thereby reshaping the horizons of possibility upon the new landscape. In this context, the UN and its international institutions begin to look like merely New York and Washington based Socratic window dressings for Thrasymachus’ ‘preference of the stronger’.

The US national security regime was also born with Roosevelt’s death and it high-jacked the Bretton Wood’s institutions, created the CIA and NSC in collaboration with former-SS operatives (Operation Paperclip), and began the ‘Cold War’. The Pax Americana, wearing the benevolent masque of the Marshall Plan (Keynesian expenditure, Sraffa, Bataille), began to lay the foundations for a United States of the world. 188 countries belong to the IMF at the moment, most out of necessity, and with little or no influence upon policy. Neo-liberalism is not a new thing, but merely a rebranding, as with Neo-consevatism, and an institutionalisation (canonisation) of anti-communism. Anti-communism, i.e. Neo-Liberalism, is the drive for absolute and unconditional power of access and control of every country in the world by the US and its preferred allies. The International Monetary Fund, created as a mere instrument of the UN, was perverted from the principles established at Bretton Woods of a cooperative system of global governance, to one that is only international within the narcissistic scope of the US and its “interests”.

If one has eyes, he or she can clearly and distinctly see that the international institutions are not an agon of contestation, but merely systems of control for US and Western power. The IMF is simply an instrument of US foreign financial policy, together with its other, military instrument of power projection, NATO. The US orients its hegemony upon the global topography of states and alliances, and operates via the IMF and other “international” organisations to infringe upon national sovereignty through conditionality, sanctions, and covert operations. Less violent violations of the sovereignty of a loan recipient are codified as the continuous assessment by bureaucratic surveillance control of the Article IV Consultation. But, no nation can be expected to cede sovereignty as collateral, especially from a UN created program, which would be similar to selling oneself into slavery due to debt. One would negate oneself, cease to be a legal entity with rights, but instead another one the conquered. Indeed, America et al.’s only interest is its own ability to do what they like, where, when, etc. Of course, there have been horrific global repercussions from America’s schizophrenic drive for eternal hegemony, hundreds of millions of deaths, disease, inequality, poverty, … indeed, the constant situation of terror has become identical to the hegemony itself – this is how it operates, as a criminal organisation, which, if one opens one’s eyes, has been clearly evident for some time when considering the actions of US and its closest allies.

The problem of course is that no major power or groupings of powers has had the courage to declare: “Enough is enough!” and work to contain the US within international law. After all, nearly every economy is dominated by US orchestrated institutions. Yet, this is merely repeating Thrasymachus – but is that why he stormed out of the room? Is it not the case, the truth, that the history of “international relations” has been, to use Hegel’s words, a ‘slaughter bench’? Has the trajectory of modern history, one claiming to offer a system of professional, i.e., Western, justice, been in truth one still exploding multi-dimensional crime against humanity? And, with a succession of competing imperial perpetrators? Since the Second World War, the US et al. have clearly and repeatedly violated International Law, which, as a result, has created a lawless world of terror, of rouge states claiming to be exceptional. International Law does exist and it has been executed numerous times since the foundation of its primary tenets, treaties, etc. But, America stands as an anarchy of power declaring its own supremacy.

Yet, there are those who reject such exceptionalism and seek to deconstruct the inexorable and culturally nullifying restriction on alternative ways of being or thinking, where Neo-liberal ideology is identified with science, but a Machiavellian science that cynically benefits the exceptional, the saved. Lex Americana is the law of conquest, echoing its foundation and declaration of independence in genocide, slavery and land annexation, and despite the mask of its rational and ‘scientific’ systemisation, is an ideological justice that suits the preference of the stronger. Most often this means financially liquidating a country, maintenance of control of export commodities, expanding and indefinite control through debt – all the while the vultures hover, profiting from reckless speculation that destroys economies or keeps them ill – destructive economics (liberalisation, de-regulation, privatisation, bankruptcy) for the purpose of maximum profit and resource extraction and long-term control. The cynicism is complete when the suppression of popular dissent becomes a disproportionate component of GDP and of revenue expenditure through the militarisation of civil society and the privatisation of prisons and police forces.

The mask of rationality is reinforced by the obsessive consistency of the IMF demands and surveillance of borrower countries and those who are members without borrowing (and the narrative disseminated in the corporate media). Formerly sovereign European nations, as with Greece, must now bend their knee to a justice of naked power, of a real politik, wearing no clothes, basking joyfully in the post-modern theatricality of ‘civilisation’ and ‘modernity.’ America medicates itself to maintain a clear conscience amidst the crime scene that is its own history and present. In its megalomaniacal delusion, it seeks not merely to control those subject nations in its unspoken empire, but seeks to create all other countries into its own image. Yet, that is the image of its delusion, and not the failure of its reality. In the echo chamber of its own genocidal narcissism, it never penetrates to it failure, but, intensified by the adrenalin of the hunt, it disperses its awareness in the events of the ever accelerating Americanisation of the world.

In its denial and delusion, America is the moral law and in its exceptional freedom, it will re-create the world. It is such Fichtean arrogance which requires no alibi. Who will challenge the stronger and its preferences? Such tacit consent becomes explicit consent as the poetic become the conceptual (Kant suggests that one merely apply his philosophy now that the thought had been done). Yet, such consent entails culpability in the crimes of the US and its allies during and since the Second World War. But, such awareness of culpability ebbs and flows in the society of the specular image of ceaseless forgetfulness and disorientation. In light of the fall of the Eastern European bloc, America relieved itself of its ‘Vietnam syndrome’, feeling that the slate had been wiped clear, that god was still on its side and the manifest destiny of it exceptional character could once again break out into full scale wars, i.e, Afghanistan, Iraq, Libya, Syria – a culturo-psychological event that is still underway and which has been continuously manipulated by spectacular activities affecting mass public opinion, such as the current illegal operations in Syria, as a very small sample.

Less overtly lethal interventions of a nation’s sovereignty occur through the IMF, and consist of ideological conditionality for loans. The IMF acts as a global loan-shark which has managed to ensnare in its global web nearly two thirds of the countries of the world. The lender of last resort has conditions which pretend to be scientific and professionally modern – and most of all non-political as it reads only “neo-classical” economics. Yet, these are only public relations and ideological masks of anarchy which annex the borrower country into its financial vortex, the entire criteria for which is the cost-recovery of ‘structural adjustment,’ the liquidation and pillaging of public assets, the acquiescence of indigenous political economic sovereignty and the establishment of a technocratic government which acquires the status of corrupt and impotent implementer of austerity, privatisation, social subsidy cuts and job losses. The IMF is the weaponisation of global finance for the interests of the West.

The IMF feeds off of corruption, and feeds corruption – there is lots of money but due to the aforementioned ideological restrictions, the money is filtered back into the commercial economy through expenditures not relating to the needs of the vast majority of people. The population struggles economically and is dis-empowered politically. It is a rare moment when a political party challenges the Neo-Liberal order, one which, as I have alluded, was inaugurated with the anti-communist appropriation of the Bretton Woods institutions after the death of Roosevelt. The latter, a progressive aristocrat, felt that the New Deal was the best way to stem the tide of rebellion. Yet, with the danger dissipated by the 1970’s, the destruction of the modern welfare state (the New Deal) began in earnest, but this was merely another phase in the unfolding of a single philosophy. The massive and dangerous shift to private prison construction and the militarisation of the police and civil society underlines the increasing dissolution of democratic governance in the West.

One of the laboratories of contemporary neo-liberalism – then also seen as a fascist method of eliminating the threat of communism – was Chile, in which a corrupt general overthrew a democratically elected government, with American financing, logistics and the collaboration of the CIA. The general instituted a strictly Neo-Liberal regime under the very direction of the Chicago school ‘free market’ sadists. Everything was privatised, children starved, there was massive brain damaged through malnutrition when black beans were substituted for European destined soy, dissenters were shot in the streets and in stadiums. South American countries were either invaded or laden with debt, often both. Assassinations and death squads were the flavour of the day. Yet, even these have been privatised, Coca Cola in Columbia having its own death squads to kill and harass trade unionists. The shift to the left in recent years has had negligible impact as most of the countries are mired in IMF conditionality. Conditionality, in this sense, is an economic stratagem of political control, a network of decisions, a series of actions, and the surveillance of each country in its most specific actions pertaining to political economic activity.

The conditionality for global borrowing an indication of the neo-liberal ideology of the IMF, has been expressed since the fall of the Bretton Woods arrangements in the early 1970’s, as the new ‘Washington Consensus’ slowly emerged, among which includes

• government budget cuts, increases in user fees for public services, and
• privatisation of state enterprises (including even municipal services);
• the lifting of price controls, subsidies and any other distortions of market forces;
• the liberalisation of currency controls and currency devaluation;
• higher interest rates and deregulation of local finance;
• the removal of import barriers (trade tariffs and quotas); and
• an emphasis on the promotion of exports, above all other economic priorities.[2]

With these comprehensive and restrictive conditions – each reflecting Neo-liberal preferences – the sovereignty of the borrower nation, its capacity for autonomy and self-governance, is severely restricted. Indeed, in the recent OXI referendum in Greece, the IMF – brought in by Angela Merkel to manage the Eurozone – completely disregarded the overwhelming will of the Greek people, forcing the Syriza government to enter a war of attrition, of postponement, with respect to the usual recipe of austerity and privatisation, the conditionality for bailout. It can be clearly seen, through a survey of other countries, such as South Africa, that these policies are counter-productive, tying the government’s hands, and causing massive dislocation amongst working people, job losses, cuts in benefits and services and higher taxes.

In other words, these policies do not work, and are not meant to work, but are imposed merely to benefit the US and its ideological allies. Economists around the world are agreed that public expenditure is the proper way out of a recession and for sustainable development. It is ironic that, after the 2008 economic crisis, while the IMF was pressuring Europe to enact austerity – and rid themselves of those inflexible welfare states – the US itself enacted a large stimulus package (Keynesian public expenditure) which has led to 5% growth in the US for several years running. The Obama stimulus package underlines the hypocrisy and double standards at play in institutions which are only nominally international and multi-lateral, but are actually implements of a multi-dimensional US national security strategy.

BRICS: An Alternative for South Africa

In an interview during the 2014 BRICS summit, President Jacob Zuma of South Africa recounted the recent history of international funding to Africa, and of the lack of an alternative to neo-colonial institutions, such as the IMF and the World Bank. Zuma said:

I am not making the call not to do business with the West, not at all. We are doing business with the West. We have been doing business with the West. I am saying now there is an alternative. You can make a choice of your own. If you want to go with all those kinds of understandings , that is your choice.[3]

Zuma not only emphasises the new potential of BRICS and its institutions as an alternative to the IMF and its neo-liberal conditions, but also underlines the emergence of a poly-centric global movement for equality amongst nations. He describes BRICS as composed of partners, who work as equals for mutual benefit – and not as former subjects who are forced to follow the directives and disciplines of the “world” institution.

South Africa is an excellent example of the mockery of the democratic transition by the IMF, and of the democratic mandate and aspirations of the overwhelming majority of the people. Indeed, the very conditions of the loan, negotiated prior to the 1994 election, bringing Nelson Mandela to power, negated the Freedom Charter, the guiding document of the democratic revolution. The Apartheid government, which was virtually propped up by the IMF, gave a poison pill to the new government in the form of an $850mil loan with the strict neo-liberal conditions of the ‘Washington Consensus.’ Indeed, the ANC was a reluctant participant to the loan negotiations, which were tightly interconnected with the political and military negotiations.

Julius Malema of the EFF may criticise his former comrades in the ANC, but he must step back and become aware that the ANC had virtually no alternative funding after the fall of the USSR in 1991, which was the most powerful of the revolution’s sponsors. The IMF was the lender of last resort for a country of extreme poverty, inequality, and racism. The ANC has received glowing reviews for its ‘prudence’ and ‘caution’ in Article IV Consultations for 20 years from the IMF, but its hands have remain bound. Yet, amid the new world of BRICS, not only is Zuma keenly aware of the problematic character of the IMF, but he is also intent on taking advantage of the new alternatives which have developed with the emergence of its longstanding partner China as a major power.

There are good reasons for South Africa, and numerous countries, to embrace the alternative of BRICS. Most importantly, the entire revolutionary project of the ANC and the Tripartite Alliance was postponed by the IMF conditions. Social and economic progress has occurred at a snail’s pace: massive inequality, poverty, unemployment, terrible working conditions, miniscule land reform, and many others. These endemic and profound problems are not due to “corruption” as opposition parties obliviously and incessantly smear the government of South Africa through the corporate media – but is caused directly by the conditionality of IMF loans, which, as we have seen, negates the Freedom Charter, attack trade unions and central collective bargaining, strip public assets, denies the nationalisation of the mines, and severely restricts public sector expenditure and unbounded government action for progress.

It would seem, upon examination of the surveillance of twenty years of Article IV Consultation Reports, that the IMF is simply interested in ‘cost recovery,’ stripping assets and expanding the web of private, household debt. The IMF is not interested in facilitating social and economic progress. If one were not convinced that the IMF cares not for the borrower nations, consider that the IMF has never erased $18bill Apartheid era debt, which according to the ‘Doctrine of Odious Debt,’ is clearly problematic. Yet, such debt and its origin clearly exposes the character of the IMF. Many activists in South Africa have been working since the 1990’s and before for a democratic settlement. CANSA, Center for Civil society, trade union and social-economic and cultural movements, Debt cancellation organisations are seeking to highlight the debt slavery being promulgated by the IMF and the World bank. President Zuma’s recent words provide momentum to the call for South Africa to re-finance its loans through the BRICS financial institutions and to write-off Apartheid debt.

The same can be said for Greece and dozens of other countries struggling to free themselves from IMF domination. It is also a word of caution to any country which is considering borrowing from the IMF. The BRICS institutions are solidly capitalised and aim to cultivate sustainable development and growth for its member countries. The recent China-Africa Summit in Johannesburg is another step in the movement toward an alternative which will truly bring about an elimination of poverty, and which will allow countries to develop their countries without having to submit to conditions which violate national sovereignty.

The age of full-spectrum dominance by the US is over, and a new world is emerging, one which understands that global equality and sustainable development, together with democracy and political equality, require the containment of the imperial ambitions of the United States, which has become over the last decade, in the words of Noam Chomsky, not only a failed state but a rogue state. American exceptionalism, i.e., “Americanism”, is a variant of imperial ideology (and even divine right ala ‘manifest destiny’) and must be resisted on a global level. Such an effort will benefit not only the world, but Americans themselves, who have been made by their corporate media into bondage gimps for all the world to see. The IMF and NATO, the power projections of full spectrum dominance, have been un-masked and must now be resisted for the sake of global equality, peace and freedom.

It is time for an end to political masochism and cowardice, an event of cultural revolution. This is as true in Greece as it is in South Africa – and the hundreds of other nations desperately seeking an alternative.

It is clear from history that empires rise and that they fall, and that America too will fall. Those who work for global cooperation and peace will outlast a sadistic empire of contradictions and schizophrenic denial.